Tag Archives: unemployment

Will Student Stipends Hurt Employment?

26 Jun
student interns

Are student interns hurting the job market?
Image: Shutterstock

Summer internships for college students are seen as essential for resume building among most college students, whether they can afford it or not.  As colleges come under increasing criticism about the disconnect between earning a degree and finding a job, most institutions are hungry for any employer willing to help students build professional skills and experience.  Some Universities are even paying employers as rich as General Motors to let students do work that companies need done without paying for the work at all, or paying only half the wage.

Of course, this practice makes the university look good and students love the allowance for being able to gain what they consider valuable work experience.  However, in a time of cutbacks, layoffs and high unemployment, many firms are dancing along the edge of federal labor laws, which require that unpaid internships to do not provide immediate financial benefit for the company.  As most companies are operating at a bare bones employment structure, most unpaid interns would likely be beneficial.  However, the number of students willing to work for free in exchange for the resume bullet has only increased, as competition for jobs becomes more intense.  Some students are even willing to do work that is unrelated to their field of study just to get the experience.

Some students, however, are lashing out.  Several lawsuits have been filed, specifically in the entertainment industry, against employers that are not willing to pay for assistance from students.  It is difficult to determine whether the practice of unpaid internships is beneficial.  On one hand, many students are willing to do work they consider valuable for free.  Universities need better relationships with employers, and many employers need a future workforce with practical skills.  However, it may be dangerous to the economy if employers are not held accountable for respecting the value of a strong labor force because they take any free labor they can get.  How likely is a firm to hire a new employee, after all, when they can get a constant stream of desperate job seekers at no cost?

Financial Analysts Watch Turkish Protestors

14 Jun

Civil unrest in Turkey is causing some concern on the part of credit agencies over whether Turkey will be able to maintain its economic performance.  While Turkish markets have recently rallied in light of Moody’s decision to upgrade the country, anti-government protests have occupied the capital and other Turkish cities for more than two weeks.  Protestors claim the political part in power is moving public policy to favor Islamic law, even though the country is officially secular.  A recent law curbing alcohol sales seems to have been the last straw for the non-religious half of Turkish citizens, and protests have persisted and in some cases become violent.

Rating agency Moody’s, led by Raymond McDaniel, said that the Turkish government will need to act swiftly and effectively to curb the unrest in order to maintain its newly achieved rating of Baa3, because the protests could reduce tourism revenue and thus affect the country’s debt to income ratio.  The protests could also make foreign investors hesitant to bring capital into the country if the government is seen as unstable, which is why agencies are emphasizing the dependence on the government’s reaction to the protests, rather than on the protests themselves.  Overall, both Moody’s and rival agency Fitch said there is no danger of a credit downgrade at this time.

The Turkish economy is performing better than expected this year and has managed to bring unemployment to the lowest rate in seven years.  Inflation is also down and the working class seems to be happy.  So far the protests are isolated to the educated groups of people who are against religious rule, rather than being able to ignite the working class.  Most analysts feel the protests will be controllable and not effect Turkey’s economy.

Job Openings On the Rise

8 Apr

Good news for job seekers: job openings are on the rise in the U.S. According to the Labor Department, this February the number of openings rose to the highest levels in nearly five years. But in March the number of payroll gains slowed down a bit, which many speculate has to do with the sequester cuts that went into effect on March 1st.

 

“Employment conditions are improving,” said Russell Price, who is a senior economist at Ameriprise Financial Inc. But it is doing so at “a frustratingly slow pace for policy makers.”

 

But despite the slowed pace, unemployment rates are now at 7.6% across the country, which is a record low since December of 2008. The hiring rate went up to 3.3 percent in February, increasing the overall number of people hired to 4.42 million that month.

 

The key to continue moving toward economic recovery will be to keep the momentum going. According to Fed Chairman Ben S. Bernanke, central bankers are looking for “sustained improvement across a range of indicators” before their policy of purchasing $85 billion of monthly bonds will change.

 

The biggest employment gains came in the health care industry, while retail companies job openings actually decreased. About 1.9 million jobs were created by the economy between March 2012 and February 2013. There were about 12 million unemployed Americans as of February, which means that for every job opening there are about 3.1 million people. When the recession began in December 2007, that number was much slimmer at 1.8 million per job opening. But it is slowly getting better.

 

The main concern now is how sequester cuts will affect the slow growth and small amount of progress that has been made. Many worry that the automatic and arbitrary cuts will be a major setback that could make unemployment spike yet again.

Five Reasons Job Seekers Are (More) Frustrated Than Ever

9 Oct

Since the economy crashed in 2008, the unemployment rates have skyrocketed. Though the official number is now just above eight percent, there are plenty more Americans in need of work—they’ve just given up. For those that continue to seek employment, times are more frustrating than ever before.

 

Though the job market is slowly improving, the number of jobs that do open up are still far fewer than the number of people seeking employment. Job seekers are getting fed up with the obstacles in their paths, and here’s why.

 

  1. Multiple layoffs and cutbacks—a huge amount of people got laid off right away in 2008. Many others had hours or wages cut back, or workloads added onto to make up for others leaving. And some of those who managed to find work again have sometimes been laid off again.
  2. Job to candidate ratios—there are far more candidates than there are jobs. Not only is there more competition, but also there are lots of very highly qualified people searching for jobs. It’s hard to get a job you are qualified for because there will invariably be someone more qualified than you.
  3. Grueling interview processes—more than ever, interview processes are long and grueling. Often there are phone screening, surveys, tests, and multiple on-site interviews. This can be discouraging, especially when, after months of hard work, you’re told they have gone with another candidate.
  4. A rollercoaster ride—because it often takes months, sometimes years to find full-time employment, many are forced to take on odd jobs and part-time work just to get by. This can be frustrating for a number of reasons. First of all, it’s probably not in the candidate’s preferred field, so they’re not furthering their career goals. And second, these jobs are often temporary and unpredictable, causing extra stress and uncertainty.
  5. The loss of unions—because of the loss of job unions, employees no longer have collective bargaining rights. Basically, employers offer a deal and say “take it or leave it,” and that’s it.